When to apply for a French mortgage

QUESTION:
“We are planning to move to France this year and would like to buy a house. We are currently salaried but will set up our business once in France and thus become self-employed. Should we wait and apply as French residents once our business is set up in France, or apply for the mortgage now from overseas?”

ANSWER:
Our advice would be to apply for a mortgage as a non-resident now, rather than as a new French resident and self-employed.

Although interest rates are slightly lower for French residents, your French business will be too recent for the bank to be able to lend right away. In fact, you would need to wait until you can provide at least 3 years of accounts/tax returns before applying for a mortgage…

However, as a salaried non-resident, the bank will simply check that you are not currently in a probation period and that your contract is permanent. Together we will do the necessary calculations to determine the maximum mortgage amount based on your current income and charges.

QUESTION:
“We are planning to move to France once our house is sold here, and we will use the cash received to make the purchase in France. We might need a small mortgage for part of the purchase or for any eventual works to be done on the property. Can you help?”

ANSWER:
With the sale of your current home, the bank will view your move as permanent. Unless you have a new salaried employment contract planned for your arrival in France (or a transfer of your position), they will be reluctant to lend any amount of money. Obtaining a mortgage, even if the amount is small, will thus not be possible…

We would advise in this case that we assess your situation as of today, taking into account your current savings, income and charges. Together we will check your borrowing capacity.

With historically low interest rates, providing you can afford a new mortgage, it makes sense to borrow towards the purchase rather than invest your cash.

Whether you choose to apply for a mortgage in France or not, avoid being in the uncomfortable position of not having sufficient funds to complete your project once you have found your dream house, and speak to us today to make sure you have considered all options!